The respiratory distress syndrome (RDS) is characterized by progressive expiratory atelectasis, with overcirculation, edema and consolidation of lungs. RDS remains the most important condition causing morbidity and mortality in newborns. It is a developmental problem, occuring in pre-term babies, usually of low birthweight. RDS results from inadequate surfactant, which normally lines the alveoli, lowers the surface tension at the air/liquid interface in the alveoli, and thus stabilizes the alveoli at low lung volumes (on expiration preventing their collapse. Surfactant is a lipid (90%/protein (10%) complex. About 90% of the lipids are phospholipids. Phosphatidylcholine (PC or lecithin is the most abundant, but depends on its stabilization in surfactant by the acidic phospholipids, phosphatidylinositol (PI) and phosphatidylglycerol (PG). In the mature fetus and in the adult, PG is the second most abundant surfactant phospholipid. Surfactant is not mature until PG appears. The biosynthesis of the acidic phospholipids is being studied in great detail, both in subcellular particles and in vivo in rabbits. Myoinositol has been found to be a key substrate regulator of surfactant synthesis by inhibiting, when in excess, the synthesis of PG. Mechanisms for possible repair of the surfactant layer are being evaluated. Especial interest is the bidirectional surfactant flux between the lamellar bodies and the alveolar surface. Since it now is feasible to consider adding surfactant directly to the airways in cases of RDS, surfactant replenishment studies also are underway, using surfactant isolated from human term amniotic fluid.